It's official: SF hosting next America's Cup

After a premature announcement early Friday afternoon, San Francisco has officially been named the host city for the next America's Cup yacht race.

The race to host the world's biggest yacht race appeared to be over Friday, but then it took a sudden and confusing turn. An announcement was released early Friday afternoon saying San Francisco had been chosen as the host city for the next America's Cup. But then, a few minutes later, the committee awarding the race, sent out a retraction saying it had not yet decided.

When Oracle CEO Larry Ellison returned with the cup last February, San Francisco was the odds on favorite to host the next regatta. But San Diego, Italy and Newport, Rhode Island also made their own pitches and San Francisco looked like it would lose the bid when the city changed the terms of the initial agreement because it was too expensive.

Supervisor Ross Mirkarimi was on San Francisco's America's Cup committee.

"The alternate proposal requires a lot less up front and certainly not requiring the liability that was originally being asked of us," he said.

The less expensive proposal gives Ellison control of Piers 30 and 32 and Pier 27, which is where Bauer Limousine is currently headquartered.

"We've actually been planning on that taking place and on the move and we think it's a terrific opportunity," Bauer CFO Gary Schwartz said.

Hornblower Cruises can carry 4,000 people to the race course and their spokesperson says the company will likely bring in more boats.

"It's going to be like Fleet Week on massive steroids; it's going to be huge," Tegan Firth said.

The next America's Cup races will be in 72-foot catamarans capable of speeds in excess of 50 miles an hour. The city will see months of racing leading up to the finals in September 2013.

The races are projected to pump $1.2 billion into the local economy.

"The work really begins and that is fulfilling the commitments we made in the host city agreement and doing the work that needs to be done," Mayor Gavin Newsom said.

This is the deal breaks down -- race organizers will pay the city $55 million for use of eight piers and they will also get to use piers 30 and 32 for 66 years. San Francisco in the meantime, will spend $35 million and half of that will come from the general fund to pay for police services during the race, all permits and taxes. Millions more will be spent on a viewing section for fans at Pier 27.

"The city can't repair its streets or educate its children but can spend millions of dollars and dedicate thousands of city employees to this elitist sport?" Leo Lacayo from the San Francisco Republican Assembly said.

But race organizers insist this is an investment that will pay off.

"You're looking at shoring up facilities along the water front that until today have not been really looked at as far as this infrastructure improvement," Marcus Young from the Golden Gate Yacht Club said.

In fact, Pier 27 will be further developed after the race, and become a new cruise ship terminal. Many businesses along the Embarcadero welcome the race.

"It will be a lot of publicity for the city and it would be good for Fisherman's Warf," Anthony Gerladi from Fishermen's Grotto 9 said.

Some taxpayers aren't buying it.

"I think the money could be spent elsewhere since it's going to be tens of millions of dollars, I think it could be invested in education," San Francisco resident Casey Watson said.